Banks are actually allowed to just create money. That’s how the money system works. Banks need only a certain amount of actual hard, physical money in their vaults and they can then lend out a certain amount more than that. In a lot of countries a bank only has to have 10% of its money in physical form compared to its loans. The rest is just numbers in a spreadsheet. This is known as Fractional Reserve Banking.
However, in response to your question in a more narrow way, what would a bank get by giving you extra money in your account? This could happen by accident, and I’m sure it has, but there’s going to be a trail. Money doesn’t just get created from nothing (yes, even going by the first paragraph here it’s created in a loan with a fraction of that loan existing as physical money in a vault). Banks have to report their money to the taxman, government, etc.
I would assume these banks collect proof of transaction and settle them by a certain date every year or such
Most banks are settled under a central bank, bank 1 and bank 2 settle transactions under the faith of central bank. They probably don’t actually transfer cash because of the system continuity.
When you transfer money between banks the two banks will both keep track of how much they owe each other bank and how much they are owed. There are various systems that the banks have implemented to clear out these debts over time. But at some point it may be necisary to transfer funds between banks. Most legislation still require the banks to settle their debts with gold but this is like paying for your house with cash, both parties hate it. So the banks will often settle their debts with government bonds instead as it is much easier to transfer then gold.
When you transfer money from one bank to another, the bank actually transfers money from their own account at the central bank to the account of the bank that holds the account you’re sending money to. So they would need to have sufficient balance to cover these transfers.
For example, bank A and bank B both have an account at the Federal Reserve. Your account is at bank A, your friend’s is at bank B, and you want to wire $1k to your friend. So you tell bank A to wire the $1k to your friend’s account at bank B. Bank A checks that your account has the money and deducts it, then forwards the request to the Federal Reserve. The Federal Reserve checks that bank A’s account has sufficient money, and transfers $1k from bank A’s account to bank B’s account, with a note of your friend’s account number. Bank B receives this deposit, and credits your friend’s account per the note on the transaction.
Your bank account isn’t just a number that says “Zemvos has 5$”.
It’s a record of all incoming and outgoing transactions, to get the balance you just add them all up.
For every transaction there has to be an equal and opposite transaction in the other persons account.
I.e. if your account has an entry “received 1$ from Jim”, Jims account will have an entry “send 1$ to Zemvos”.
Now a bank could ofcourse just add an unmatched transaction to an account. But (at least in theory) they get audited regularly and the unmatched transaction will be found and the bank punished.
The key concept to start this off with is that we all owe money to and are owed money by everyone else when we buy or sell a service or good. Banks are the clearing houses for us. We use banks because we all accept their promise to pay. When you transfer money the bank debits your account (you have less credit on account with the bank) and they credit the person you are transferring to an equal amount.
If this transfer is between banks they will settle in real time on an aggregate basis eg Bank A owes Bank B $50, Bank B owes Bank A $60 so in total Bank B owes Bank A $10. That “money” is a credit issued to Bank A as a note endorsed by the other bank (there is interest on this). This note is an asset for Bank A which can use it as money to fund lending or settle debts.
Note the concept is similar in most countries. Most central banks have done away with the need for banks to maintain balances with them.
The concept of cash is that it the paper notes or “money” are good for credit with the government which everyone and every business accepts as payment.
When you buy bitcoins, the first transfer was from real cash to bitcoins, but let’s say you then only invest in stuff and gain interest with bitcoins, then that is all digital.
Bitcoin is specifically designed so you can’t hack the system, and there’s technically nothing banning banks from using a similar system as a backbone for monitoring currency flows.
But in the end you always have the possibility to exchange bitcoins for real cash, as long as you find someone interested in buying your bitcoins.
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